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May 02. 2014 9:44PM

PSNH says upcoming rate hike a result of winter fuel costs

Public Service of New Hampshire is projecting a 1.7 percent rate hike for customers starting July 1, citing last winter’s high fuel costs.

An average PSNH energy customer using 500 kilowatt hours of electricity a month would pay $93.55 a month compared to $91.99 currently. That same customer paid $87.75 the last six months of last year, said PSNH spokesman Martin Murray.

That would mean a 6.6 percent year-over-year hike if PSNH sticks with its forecast and the state Public Utilities Commission approves the request.

PSNH said it encountered high energy costs last winter when it had to buy power on the open market.

The energy service charge, which includes the cost of power, is forecast to climb 8.2 percent from Jan. 1 to July 1, Murray said. That rate is projected to stand at 9.98 cents per kilowatt hour.

“The reason it is increasing this year is because of extreme volatility in the regional marketplace as a result of mainly the supply and volatility of natural gas, which the region is increasingly dependent on,” Murray said Friday.

PSNH is required to provide a forecast to regulators ahead of its official rate filing to adjust rates effective July 1.

“The numbers could certainly change in June,” Murray said. That happened late last year when the initial forecast of 8.96 cents per kilowatt hour for the energy service charge was changed to 9.23 cents.

Murray said a migration of customers away from PSNH to independent suppliers reversed during the winter and the company had to buy energy from the marketplace to fill the demand.

“Independent suppliers have acknowledged that they move customers back to PSNH when market prices are higher than our Energy Service rate,” Murray said. “That requires us to then purchase higher priced energy from the market to meet demand above and beyond what our more economical power plants produce. Part of our July 1 adjustment is to recover the incurred cost.”

Doing that “saves the supplier money,” Murray said. “We don’t have the same flexibility to dismiss a customer if we wish because prices are high.”

A statement from North American Power, which has about 40,000 New Hampshire electric customers said: “North American Power does not move customers back to PSNH service when market prices are higher.”

Officials at Power NE, another independent power supplier, weren’t available for comment.

PSNH said the projected rate increase could be less if the Legislature passes a Senate bill that reallocates how PSNH charges customers for expenses of the state Public Utilities Commission.

Northern Pass, a controversial electric transmission project that would deliver hydropower from Canada to New England, would have helped offset the proposed increase, Murray said.

“That would have lessened the need for more expensive fossil fuel energy consumption,” Murray said.

mcousineau@unionleader.com



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